李漢能 v. 葉慧璣

HCA 2275/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2275 OF 2002

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D E C I S I O N

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1.  By an order of 11 May 2006, a Master allowed the plaintiff to re-amend his amended statement of claim and to join the 2nd defendant in this action.  The 1st defendant took the view that the amendment was useless and should not have been allowed it.  She now appeals again this order.

2.  The plaintiff was a son of one Lee Leung Fuk-yee (“the deceased”).  He is also one of the eleven beneficiaries named in the will of the deceased.  Nine of the beneficiaries were the children of the deceased and the remaining two were her grandchildren.  The 1st defendant is the wife of one of the children and he is also one of the beneficiaries.

3.  In the original statement of claim drafted in Chinese, the plaintiff pleaded that in 1991 to 1992, he and three other beneficiaries had appointed the 1st defendant to manage certain real properties in Foshan which belonged to the estate of the deceased.  He further pleaded that the 1st defendant had failed to provide an account of her dealings with these properties despite his requests.  He therefore prayed for an account by the 1st defendant. 

4.  On 10 March 2004, the plaintiff issued a summons to amend the statement of claim by adding two averments in Chinese, saying that in about 1995 another beneficiary also authorised the 1st defendant to manage the Foshan properties which belonging to the estate of the deceased, and that the 1st defendant had, pursuant to such agency authority, obtained the interest in these properties on behalf of the estate.

5.  On 20 March 2004, the 1st defendant issued a summons to strike out the original statement of claim. 

6.  The plaintiff’s summons to amend and the 1st defendant’s summons to strike out were heard before a Master on 8 July 2004.  At the start of the hearing, it was agreed that leave should be given to the plaintiff to amend the statement of claim and the 1st defendant’s summons to strike out would be treated as a summons to strike out the amended statement of claim. 

7.  The hearing did not conclude on that day and was adjourned to 24 July 2004.  However, on 14 July 2004, the plaintiff took out another summons to re-amend the Chinese amended statement of claim.   The draft re-amended statement of claim was entirely in English and the Chinese amended statement of claim was abandoned.  By this summons the plaintiff also sought to join the 2nd defendant in the action.  The 2nd defendant is the executrix of the estate of the deceased.

8.  On 24 July 2004, the Master continued with the 1st defendant’s summons issued on 20 March 2004 to strike out the Chinese amended statement of claim.  The plaintiff’s summons to re-amend the amended statement of claim and to join the 2nd defendant was not dealt with.  At the conclusion of the hearing the master made a conditional order that unless the plaintiff should succeed in the summons to re-amend and for joinder, the Chinese amended statement of claim would be struck out.  This is an unusual order. 

9.  I think the correct procedure would have been to deal with the plaintiff’s summons to re-amend first.  If the plaintiff should succeed with that, the action would go on as against two defendants on the basis of the re-amended statement of claim.  In that event, the 1st defendant’s summons to strike out the Chinese amended statement of claim need not be dealt with save the question of costs.  Those costs would normally follow the merit of that summons despite the fact that that summons had been overtaken by the re-amendment.  However, if the summons to re-amend the amended statement of claim should fail, the Master should then go back to deal with the 1st defendant’s summons to strike out the Chinese amended statement of claim.  Though that course was not taken, the ultimate result would not be different.

10.  In the re-amended statement of claim, there is a new cause of action; namely that the plaintiff has personally appointed the defendant as his agent to manage the very same real properties in Foshan and the 1st defendant has failed to render any account to him.  The plaintiff thus prays for an account, together with payment upon taking of the account.  The 1st defendant submitted that both causes of action are unsustainable and leave should not have been given for the re-amendment or joinder of the 2nd defendant.

11.  I now deal with the new cause of action.  The summons to re-amend, which sought to introduce the new cause of action, was issued by the plaintiff on 14 July 2004.  It was supposed to be heard on 25 October 2004.  However, on 15 October 2004 the 1st defendant’s solicitors indicated that the account sought by the plaintiff would be available soon and proposed to adjourn the hearing.  The plaintiff’s solicitors, by a letter of 20 October 2004, agreed to adjourn that hearing to a date to be fixed. 

12.  On 6 November 2004, the 1st defendant’s solicitors delivered to the plaintiff’s solicitors an account of the receipts and payments in relation to the Foshan properties.  The account, together with supporting documents, came to some 309 pages.  The covering letter from the 1st defendant’s solicitors also requested the plaintiff to consider the account, and if he should have any query, the 1st defendant promised to provide answers.  The plaintiff did not raise any query on the account.  He also did not withdraw his summons to re-amend.

13.  On 8 April 2005, another Master made an unless order that the summons to amend be set down for hearing no later than 22 April 2005.  It was then set down and was heard on 11 May 2006.  

14.  Though the summons to re-amend, which introduced the new cause of action, was issued before the account was delivered on 6 November 2004.  However, as soon as the account was delivered, there was no justification for the new cause of action to be introduced.  There is no suggestion that the account, as delivered, is so deficient that it is in fact not an account.  So what was left after the delivery of the account should have been the costs of the summons to re-amend up to that stage.  There was no point in re-amending the amended statement of claim to include this new cause of action which would not result in any relief.  The court would not order the delivery of an account that has already been delivered.  If the plaintiff should find any insufficiency or deficiency in the account as delivered, he could raise the same with the 1st defendant for clarification, failing which, he could start a fresh action against her for clarification.  I therefore agree with the 1st defendant that leave should not have been given for this new cause of action to be pleaded after 6 November 2004 when the account was delivered.

15.  On the other cause of action, which was brought by the plaintiff in his own name as a beneficiary of the estate of the deceased, it is settled law that any action to be brought by an estate against a third party should normally be brought by the executor or executrix.  It is only in cases that have special circumstances that the beneficiary can bring the action in his own name and joining the executor as a co-defendant.  The authorities are Sharpe v San Paulo Railway Company (1873) LR 8 Ch App 597; Yeatman v Yeatman (1877) 7 Ch D 210; Beningfield v Baxter (1886) 12 App Cas. 167; Wong Yu Shi v Wong Ying Kuen (No. 1) [1957] HKLR 420; In re Field, deceased [1971] 1 WLR 555; and Hayim v Citibank NA & Anor [1987] 1 AC 730. 

16.  The special circumstance submitted by the plaintiff herein is that he is paying the costs of the action and that avoids any costs exposure to the estate.  However, the executrix has been joined as the 2nd defendant, and I agree with Miss Lau, for the 1st defendant, that if the 2nd defendant should apply for a Beddoe order the estate will likewise be exposed.

17.  Mr Chan, for the plaintiff, further argued that if the plaintiff should apply before the Probate Judge for leave to use the name of the 2nd defendant to sue the 1st defendant, and also to provide an indemnity of costs to the estate, the Probate Judge would give him leave to do so.  I do not want to comment on what the plaintiff may do before the Probate Judge, but he will have to provide evidence to convince the Probate Judge that the action should proceed.

18.  What is before me now is only some averments in the re-amended statement of claim saying that the 1st defendant, as the agent of the estate, has failed to provide an account of the properties in Foshan.  I do not think this alone is enough to convince the Probate Judge that the action should go on and allow the plaintiff to use the name of the 2nd defendant for such purpose.  This is particularly so when the 1st defendant has already rendered an account of the same properties, though not as the agent of the estate and rather as the agent of the beneficiaries themselves.  I reiterate that there is not yet any criticism raised on this account.  There is clearly no special circumstances that can justify the plaintiff suing the 1st defendant in his own name as a beneficiary of the estate. 

19.  I therefore agree with the 1st defendant that leave should not have been granted for the re-amended statement of claim to be used.  I thus allow the appeal with costs.  Under the Master’s order of 24 July 2004, the Chinese amended statement of claim is now struck out automatically and the whole action is gone.

Submissions on costs

20.  The 1st defendant has taken steps to oppose the plaintiff’s summons to re-amend.  I order that the costs of the action should be paid by the plaintiff to the defendants save that there be no order as to costs for the plaintiff’s summons to re-amend from the date of its issue up to 20 October 2004.